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Vodafone Group PLC
Vodafone Group PLC
The name Vodafone comes from voice data fone, chosen by the company to "reflect the
provision of voice and data services over mobile phones".[8]
Contents
[hide]
1 Vodafone Group
2 Europe
3 Asia-Pacific
4 Africa and the Middle East
5 The Americas
6 Mobile Money Transfer
Service
7 Chief Executives
8 Financial results
9 Criticisms
10 Products
11 See also
12 References
13 External links
[edit]Vodafone Group
Newbury: New Vodafone Headquarters. This HQ is situated in the north western section of the grid square and
the picture was taken from the west side of the building. Most of this square is residential with some farmland and
some commercial activity.
In 1980, Sir Ernest Harrison OBE, chairman of Racal Electronics plc's, the UK's largest
maker of military radio technology, agreed a deal with Lord Weinstock of General Electric
Company plc to allow Racal to access some of GEC's tactical battlefield radio technology.
Briefing the head of Racal's military radio division Gerry Whent to drive the company into
commercial mobile radio, Whent visited GE's factory in Virginia, USA in 1980.[10]
In 1982, Racal's newly formed subsidiary Racal Strategic Radio Ltd under CEO Whent, won
one of two UK cellular telephone network licences; the other going to British Telecom[11]
[12]
The network, known as Racal Vodafone was 80% owned by Racal, Millicom with 15%
and Hambros Technology Trust 5% respectively. Vodafone was launched on 1 January
1985.[13] Racal Strategic Radio was renamed Racal Telecommunications Group Limited in
1985.[12]On 29 December 1986, Racal Electronics bought out the minority shareholders of
Vodafone for GB£110 million.[14]
Under stock market pressure to realise full value for shareholders (the mobile unit was being
valued at the same amount as the whole Racal group), in September 1988, the company
was again renamed Racal Telecom, and on 26 October 1988, Racal Electronics floated 20%
of the company. The flotation valued Racal Telecom at GB£1.7 billion.[15] On 16 September
1991, Racal Telecom was demerged from Racal Electronics as Vodafone Group.[16]
In July 1996, Vodafone acquired the two thirds of Talkland it did not already own for £30.6
million.[17] On 19 November 1996, in a defensive move, Vodafone purchased Peoples
Phone for £77 million, a 181 store chain whose customers were overwhelmingly using
Vodafone's network.[18] In a similar move the company acquired the 80% of Astec
Communications that it did not own, a service provider with 21 stores.[19]
On 21 September 1999, Vodafone agreed to merge its U.S. wireless assets with those
of Bell Atlantic Corp to form Verizon Wireless.[22] The merger was completed on 4 April 2000.
In November 1999, Vodafone made an unsolicited bid for Mannesmann, which was rejected.
Vodafone's interest in Mannesmann had been increased by the latter purchase of Orange,
the UK mobile operator.[23] Chris Gent would later say Mannesmann's move into the UK
broke a "gentleman's agreement" not to compete in each other's home territory.[24] The
hostile takeover provoked strong protest in Germany, and a "titanic struggle" which saw
Mannesmann resist Vodafone's efforts. However, on 3 February 2000, the Mannesmann
board agreed to an increased offer of £112bn, then the largest corporate merger ever.[24] The
EU approved the merger in April 2000. The conglomerate was subsequently broken up and
all manufacturing related operations sold off.
On 28 July 2000, the Company reverted to its former name, Vodafone Group plc. In April
2001, the first 3G voice call was made on Vodafone United Kingdom's 3G network.
Vodafone in Iaşi, Romania
A map showing Vodafone Global Enterprise' footprint.
Vodafone Operating Countries
Vodafone's partners and affiliates
In 2001, the Company acquired Eircell, the largest wireless communications company in the
Republic of Ireland, from eircom. Eircell was subsequently rebranded as Vodafone Ireland.
Vodafone then went on to acquire Japan's third-largest mobile operator J-Phone, which had
introduced camera phones first in Japan.
[edit]Europe
Networks in Europe
Romania
Spain
Turkey
UK
In February 2002, Finland was added into the mobile community, as Radiolinja is signed as
a Partner Network. Radiolinja later changed its named toElisa. Later that year, the Company
rebranded Japan's J-sky mobile internet service as Vodafone live!, and on 3 December
2002, the Vodafone brand was introduced in the Estonian market with signing of a Partner
Network Agreement with Radiolinja (Eesti). Radiolinja (Eesti) later changed its name to
Elisa.
In June 2005, the Company increased its participation in Romania's Connex to 99%, and
also bought the Czech mobile operator Oskar. On 1 July 2005, Oskar of the Czech Republic
was rebranded as Oskar-Vodafone. Later that year, on 17 October 2005, Vodafone
Portugal launched a revised logo, using new text designed by Dalton Maag, and a 3D
version of the Speechmark logo, but still retaining a red background and white writing (or
vice versa). Also, various operating companies started to drop the use of the SIM
card pattern in the company logo. (The rebranding of Oskar-Vodafone and Connex-
Vodafone also does not use the SIM card pattern.) A custom typeface by Dalton
Maag (based on their font family InterFace) formed part of the new identity.
In 2006, the Company rebranded its Stoke-on-Trent site as Stoke Premier Centre, a centre
of expertise for the company dealing with Customer Care for its higher value customers,
technical support, sales and credit control. All cancellations and upgrades started to be dealt
with by this call centre. On 5 January 2006, Vodafone announced the completion of the sale
of Vodafone Sweden to Telenor. On February 2006, the Company closed its Birmingham
Call Centre. On 1 February 2006, Oskar Vodafone became Vodafone Czech Republic,
adopting the revised logo, and on 22 February 2006, the Company announced that it was
extending its footprint to Bulgaria with the signing of Partner Network Agreement
withMobiltel, which is part of mobilkom Austria group.
Early in January 2007, Telsim in Turkey adopted Vodafone dual branding as Telsim
Vodafone, and on 1 April 2007, Telsim Vodafone Turkey dropped its original brand and
became Vodafone Turkey. In addition, Vodafone Turkey also gives service in Turkish
Republic of Northern Cyprus. On 1 May 2007, Vodafone added Jersey and Guernsey to the
community, as Airtel was signed as Partner Network in both crown dependencies. In June
2007, the Vodafone live! mobile internet portal in the UK was relaunched. Front page was
now charged for, and previously "bundled" data allowance was removed from existing
contract terms.[27] All users were given access to the "full" web rather than a 'Walled Garden',
and Vodafone became the first mobile network to focus an entire media campaign on its
newly launched mobile internet portal in the UK.[28] On 1 August 2007, Vodafone
Portugal launched Vodafone Messenger, a service with Windows Live
Messenger and Yahoo! Messenger.
Vodafone Lion of Munich's Löwenparade
At the end of 2007, Vodafone Germany was ranked 6th in Europe by subscriber numbers,
whilst its Italian operation was listed as 10th. Vodafone UK was ranked 13th, whilst Spain
was listed in 16th place.[29]
On 17 April 2008, Vodafone extended its footprint to Serbia as Vip mobile was added to the
community as a Partner Network, and on 20 May 2008, the Company added VIP
Operator as a Partner Network, thereby extending the global footprint to the Republic of
Macedonia. In May 2008, Kall of the Faroe Islands rebranded as Vodafone Faroe Islands.
On December 2009, Vodafone Spain created a fake entry on Wikipedia to promote a mobile
phone plan called "Feliz Borabó".[32]
[edit]Asia-Pacific
Networks in Asia-Pacific
Majority-owned Minority-owned No Ownership
Samoa Singapore
Thailand Turkmenistan
Uzbekistan
In July 1993, BellSouth New Zealand's network went live, and October 1993 Vodafone
Australia's network also went live. This was followed in July 1994 by Vodafone Fiji's network
going live.
The Vodafone building on Fanshawe Street, corner Halsey street, looking northeast, Auckland City, New
Zealand.
On 6 February 2007, along with the partnership with Digicel Caribbean (see below), Samoa
was added as a Partner Market. Then on 11 February 2007, the Company agreed to acquire
a controlling interest of 67% in Hutchison Essar Limited for US$11.1 billion. At the same
time, it agreed to sell back 5.6% of its AirTel stake back to the Mittals. Vodafone would retain
a 4.4% stake in AirTel. On 21 September 2007, Hutch was rebranded to Vodafone in India.
On 10 February 2008, Vodafone announced the launching of M-Paisa mobile money transfer
service on Roshan's (Afghanistan's largest GSM operator) network: Afghanistan was added
to the Vodafone footprint.
On 5 September 2008, Vodafone purchased Australia's largest bricks and mortar mobile
phone retailer Crazy John's adding 115 retail stores to its local operations.[34]
On 9 February 2009, Vodafone announced a merger with 3/Hutchison via a joint venture
company VHA Pty Ltd, which would offer products under the Vodafone brand. dtac in
Thailand is signed as a partner network of the Group on 25 March 2009.
1
Majority stakes held through majority-owned Vodacom Group
2
Effective ownership is not majority, but full control exercised by the group.
Egypt
Vodafone also received public and media criticism for allowing the authorities to send mass
pro-government messages via SMS over their network during the protests. One such
message requested that "honest and loyal men" should "confront the traitors and criminals".
Vodafone later issued a statement asserting that they had no choice but to allow the
messages to be broadcast, and that they had complained to the Egyptian authorities about
the practice.[37]
Kuwait
On 18 September 2002, Vodafone signed a Partner Network Agreement with MTC group
of Kuwait. The agreement involved the rebranding of MTC to MTC-Vodafone. On 29
December 2003, Vodafone signed another Partner Network Agreement with Kuwait's MTC
group. The second agreement involved co-operation in Bahrain and the branding of the
network as MTC-Vodafone.
South Africa (Vodacom)
On 3 November 2004, the Company announced that its South African affiliate Vodacom had
agreed to introduce Vodafone's international services, such as Vodafone live! and partner
agreements, to its local market.
In November 2005, Vodafone announced that it was in exclusive talks to buy a 15% stake of
VenFin in Vodacom Group, reaching agreement the following day. Vodafone
and Telkom then had a 50% stake each in Vodacom. Vodafone now owns 65% of Vodacom
after purchasing a 15% stake from Telkom.[38]
On 9 October 2008, the company offered to acquire an additional 15 per cent stake
in Vodacom group from Telkom. The finalised details of the agreement were announced on
6 November 2008. The agreement called for Telkom to sell 15 per cent of its 50 per cent
stake in Vodacom to the group, and demerge the other 35 per cent to its shareholder.
Meanwhile, Vodafone has agreed to makeVodacom its exclusive sub-Saharan Africa
investment vehicle, as well as continuing to maintain the visibility of the Vodacom brand. The
transaction is closed in May/June 2009.
In December 2007, a Vodafone Group-led consortium was awarded the second mobile
phone licence in Qatar, and on 3 July 2008, Vodafone agreed to acquire a 70% stake
in Ghana Telecom for $900 million. The acquisition was consummated on 17 August 2008.
The same group-led consortium won the second fixed-line licence in Qatar on 15 September
2008.
On 28 January 2009, the group announced a partner network agreement with Du, the
second-largest operator of the United Arab Emirates. The agreement involved co-operation
on international clients, handset procurement, mobile broadband etc.
Libya
On 24 February 2010, the group signed a partner network agreement with the second-
largest operator in Libya, al Madar.
[edit]The Americas
Minority-
No Ownership
owned
Antigua &
USA 1
Anguilla 2
Aruba 2
Barbados 2
Barbuda 2
Bermuda 2
Bonaire 2
Canada 3
Cayman Islands 2
French West
Chile 4
Curaçao 2
Dominica 2
Indies2
Grenada 2
Guyana 2
Haiti 2
Honduras 2
Jamaica 2
Panama 2
St. Kitts & St. Lucia 2
Nevis 2
St. Vincent & the Trinidad &
Turk & Caicos 2
Grenadines 2
Tobago 2
1
– Verizon Wireless
2
– Digicel (Partner)
3
– America Movil (Partner in some countries)
4
– Entel PCS (Partner)
In the United States, Vodafone owns 45% of Verizon Wireless, the country's largest mobile
carrier after their merger with Alltel. The percentage of the customer base, and revenues of
Verizon Wireless that Vodafone consolidates is slightly lower, since some Verizon Wireless
subsidiaries have minority investors. (Hence the exact percentages that Vodafone and
Verizon report vary from period to period: in June 2006 Vodafone reported that Verizon
Wireless owned 98.6% of its customers at that date.) Before this joint venture was formed,
Vodafone merged with AirTouch Communications of the U.S. in June 1999, and changed its
name to Vodafone Airtouch plc. In September 1999, Vodafone Airtouch announced a $70-
billion joint venture with Bell Atlantic Corp. Verizon Wireless was composed of Bell Atlantic's
and Vodafone AirTouch's U.S. wireless assets, and began operations on 4 April 2000.
However, Verizon Communications - the company formed when Bell Atlantic
and GTE merged on 30 June 2000 - owns a majority of Verizon Wireless, and Vodafone's
branding is not used, nor is the CDMA network compatible with GSM phones. This
relationship has been quite profitable for Vodafone, but there have historically been three
problems with it. The first is the above-mentioned incompatibility with the GSM
900/1800 MHz standard used by Vodafone's other networks, and the consequent difficulty of
offering roaming between Vodafone's U.S. and other networks. The other two stem from the
fact that Vodafone does not have management control over Verizon Wireless. Vodafone is
thus unable to use the Vodafone brand for its U.S. operations, and (perhaps more
importantly) has no control of dividend policy at Verizon Wireless, and is therefore entirely at
the mercy of Verizon management with respect to cash flow from Verizon Wireless.
Perhaps as a consequence of these reasons, Vodafone made a bid for the entirety of AT&T
Wireless when that company was for sale in 2004. Had this bid been successful, Vodafone
would presumably have sold its stake in Verizon Wireless, and then rebranded the resultant
business as Vodafone. However, Cingular Wireless, at the time a joint venture of SBC
Communications and BellSouth (both now part of AT&T), ultimately outbid Vodafone and
took control of AT&T Wireless (the combined wireless carrier is now AT&T Mobility), and
Vodafone's relationship with Verizon has continued.
Early in 2006, Verizon re-iterated their desire to buy out the remaining 45% of stock of
Verizon Wireless from Vodafone Group. Vodafone has also repeatedly indicated that it
would be willing to buy out Verizon's stake.
Verizon has announced that its 4G data network will be LTE, which is considered part of
the GSM path and not the CDMA2000 path Verizon has been using; it has been
suggested[who?] this is to appease Vodafone, which uses GSM on its own networks.
On 11 May 2008, Vodafone sealed a trade agreement with the Chilean Entel PCS Chile, in
which Entel PCS has access to the equipment and international services of Vodafone, and
Vodafone will be one of the trademarks of Entel for the wireless business. This step will give
the Vodafone brand access to a market of over 15 million people, currently divided among
three companies: TelefonicaMovistar, Claro, and Entel PCS.
By February 2008, the M-PESA money transfer system in Kenya had gained 1.6 million
customers[40] and Vodafone announced that it was to extend the service to Afghanistan.
[41]
The service here was launched on the Roshan network under the brand M-Paisa with a
different focus to the Kenyan service. M-Paisa was targeted as a vehicle for microfinance
institutions' (MFI) loan disbursements and repayments, alongside business to business
applications such as salary disbursement.
The Afghanistan launch was followed in April 2008 by the announcement of further a further
launch of M-PESA in Tanzania. As an operator of money transmission services, Vodafone
became subject to anti-money laundering regulation and in July 2008, it was revealed that it
had deployed a sanctions and PEP (Politically Exposed Persons) screening solution
from Datanomic for weekly screening of 2.5 million customers in Tanzania.[42] The screening
service was to be rolled out to Afghanistan, Kenya, India and Datanomic disclosed that the
solution might be used to screen all of Vodafone's 300 million customers globally.
[edit]Chief Executives
Name Between
Sir Christopher
January 1997 – July 2003
Gent
In a period just short of twenty years from its initial public offering, the Company had had just
three Chief Executives. The fourth CEO, Vittorio Colao, stepped up from Deputy Chief
Executive in July 2008. Each of his predecessors made a personal contribution to the
development of the Company.
Sir Gerald Whent, at that time an Executive with Racal Electronics plc, was responsible for
the bid for a UK Cellular Network licence. The Mobile Telecoms division was de-merged,
and was floated on the London Stock Exchange in October 1988 and Sir Gerald became
Chief Executive of Racal Telecom plc. Over the next few years the company grew to
become the UK's Market Leader, changing its name to Vodafone Group plc in the process.
Sir Christopher Gent took over as Chief Executive in January 1997, after Sir Gerald's
retirement. Sir Christopher was responsible for transforming Vodafone from a small UK
operator into the global behemoth that it is today, through the merger with the American
AirTouch and the takeover of Germany's Mannesmann.
Arun Sarin was the driving force behind the Company's move into emerging markets such as
Asia and Africa, through the purchases such as that of Turkish operator Telsim, and a
majority stake in Hutchison Essar in India. Faced with increased competition, and
penetration rates above 100% in the more mature European markets, he saw it necessary to
diversify from being a mobile-only business into a company which provided all
telecommunications services. This has seen Vodafone launch DSL and other fixed-line
services in markets such as Germany and the UK.
[edit]Financial results
Vodafone reports its results in accordance with International Financial Reporting
Standards (IFRS).
Vodafone has some large minority stakes, which are not included in its consolidated
turnover. In order to provide additional information on the overall scale and growth trends of
its business, it publishes "proportionate turnover" figures, and these are included in the
tables below. For example, if a business in which it owns a 45% stake has turnover of £10
billion, that equals £4.5 billion of proportionate turnover for Vodafone. Proportionate turnover
is not an official accounting measure, and Vodafone's proportionate turnover should be
compared with other companies' statutory turnover.
Vodafone also produces proportionate customer number figures on a similar basis, e.g. if an
operator in which it has a 30% stake has 10 million customers that equals 3 million
proportionate Vodafone customers. This is a common practice in the mobile
telecommunications industry.
Year ended 31 Turnover Profit before Profit for the Basic eps (pence Proportionate
March £m tax £m year £m ) customers (m)
*Losses for year to 31 March 2006 reflect write downs of assets, principally in relation to the Mannesmann acquisition. Proportionate
The group's recent first quarter trading update (24 July 2009) saw management reiterating
its profit guidance for the full year. Whilst revenues across Europe had been relatively weak,
mirroring general economic conditions, there had been a positive showing from South Africa,
with the company's Indian purchase of Hutchison Essar continuing to generate returns.
Meanwhile, its joint venture with Verizon in the US had strengthened further, with Vodafone's
overall customer base now standing at 315 million - 8 million having been added during the
first quarter. In addition, management noted that its cost reduction programme, targeted to
save £1bn in operating costs by the end of the 2011 financial year, would reach 65pc of its
target by the end of the current financial year.[43] The Group admitted in August 2010 that
£1.25 billion in tax that should have been paid in Britain was actually paid in Luxembourg
and elsewhere.[44]
[edit]Criticisms
The news of this legal tax avoidance sparked angry protests, beginning in October 2010 and
ongoing as of January 2011, outside Vodafone shops across the UK, organised under the
banner of UK Uncut. The first protests caused the simultaneous closure of over a dozen
stores, including the flagship Oxford St. branch.[45]
[edit]Products
In October 2009, it launched Vodafone 360 [1], a new internet service for the mobile, PC and
Mac. On February 15, 2010 Vodafone launched world's cheapest mobile phone known
as Vodafone 150, will sell for below $15 (£10) and is aimed at the developing world. It will
initially be launched in India, Turkey and eight African countries including Lesotho, Kenya
and Ghana.[50]